The Energy Goliaths Driving Global Demand

23 Nov 2017   China, India

The two countries, world leaders in population size, will be crucial drivers in world economic growth and the consumption of energy. But measuring future trends with any accuracy has been a difficult prospect for organizations like the U.S. Energy Information Agency (EIA), which released a report on China and India on November 21. China’s economic growth has been continually revised by the EIA over the years. In 1990, it was estimated that China’s economy would grow by 4.5 percent between 1990 and 2000. In fact, China achieved an average of 10.4 percent per year during that time, and maintained that rate between 2000 and 2010. A peak rate was reached in 2007 when the Chinese economy grew by 14.2 percent. Its growth rate has subsequently slowed, with 2016 seeing the slowest rate (6.7 percent) in twenty-five years. The EIA’s total energy consumption projection for China was consequently way off […]

No joke: China government warns northern cities to get serious in war on smog

23 Nov 2017   China, Climate

 Some northern Chinese cities failed to improve air quality by much last month, hitting the smog-prone region’s overall results in a drive against pollution, the government said as it warned provincial officials to comply with stringent steps to clear the skies.  “Some cities did not improve air quality by much or even experienced some volatility, and in a way, they have dragged down the regional air quality level,” Ministry of Environmental Protection (MEP) spokesperson, Liu Youbin, said at a regular briefing on Thursday. Sponsored He did not identify the underperforming cities, but the comment comes amid concerns about the country’s ability to reduce pollution in winter as it battles […]

China diesel in rare rally as smog war, tax fears stir supply worries

23 Nov 2017   China

A rally in China’s diesel prices has pushed the fuel to a rare premium over gasoline as dealers scramble to scoop up supplies amid fears of shortages due to Beijing’s war on smog and possible tax changes.  Led by a spike in benchmark crude prices, wholesale diesel prices have jumped 11 percent since October to 6,700 yuan ($1,011) per tonne on Tuesday in eastern Shandong province, a 320 yuan premium to gasoline, according to consultancy Longzhong Information Group. Diesel, which normally trades at a discount to gasoline, touched a 500 yuan premium earlier this month, the widest premium in at least two years, even though the market remains well supplied. Sponsored “Diesel prices have been rising madly … almost every day […]

The global resource shortage you have never heard about

21 Nov 2017   China

If someone were to ask you to name the most-extracted materials on Earth, you might answer – fossil fuels or biomass. However, by weight, the answer is actually sand and gravel. Picture sand and most people think of seas, river deltas, deserts and endless miles of beaches – a never-ending resource that seemingly will last forever. However, the exploitation of sand, caused by increased urbanization and unregulated mining of this global resource has already caused environmental damage, endangering communities, impacted water supplies and caused violent conflict. Over the years, very little thought has gone into the socioeconomic and environmental impacts sand mining may have on a region or community. Sand, an unflashy and seemingly infinite resource, is the chief ingredient in cement and the hidden hand behind the explosion of cities worldwide Sand used in urban development Sand is a key ingredient in concrete, glass, asphalt, and electronics, making […]

Is China making U.S. irrelevant to the future of automobiles?

21 Nov 2017   China, Electric Cars, USA

The first automobile was invented in Germany in 1885 by Karl Benz, but it was the U.S. that led the building of the global 20th-century automobile industry. Through the turn of the current century, the U.S. new-vehicle market was the world’s largest, and General Motors was for decades the world’s largest car company. Neither of those is still the case—and an increasing number of analysts, commentators, and industry executives have worried that the U.S. may become less relevant to the future of automobiles in the 21st century. DON’T MISS: China developing timetable to end sales, production of gasoline cars The volume of concern increased after the stunning early-September announcement that China is developing plans to end the sale of new vehicles with combustion engines. It has long been that country’s government-industrial policy to dominate […]

China Is The World’s Biggest Energy Market Mover

20 Nov 2017   China

China is the biggest importer of crude oil to date. It is also the biggest single investor in renewable energy. However you look at it, China has become the most dominant player on several markets, including coal, oil, and renewable energy, plus electric cars—it is already the biggest car market in the world. And this will continue to be so, it seems, for the foreseeable future and even beyond. In an overview of Chinese energy developments for Bloomberg Businessweek, analyst Liam Denning calls China an energy gorilla that will maintain its size until at least 2040, consuming less fossil fuels and investing more in renewable energy. That’s pretty much what IEA said in its latest World Energy Outlook, and it probably didn’t surprise anyone. China has been swinging markets for a while now. Earlier this year, for example, when Beijing announced a firm plan to phase out internal combustion […]

China’s Quest For Clean Air Could Hit You in the Wallet

20 Nov 2017   China

Smokestack corporate consolidation has pushed up metals prices Impact passing through to consumer goods as cleanup gains pace The great Chinese environmental cleanup, now in full swing, is shifting the corporate landscape in unexpected ways and even stoking inflationary pressure that may soon be felt in supply chains worldwide. As President Xi Jinping’s government intensifies the fight against the country’s world-class pollution problem, companies are scrambling to adapt to tighter regulation while investing in cleaner energy. In industries from steel to textiles and consumer goods, the resulting shakeout has left the survivors with far more pricing power. That in turn is reinforcing the already-resurgent factory prices that contribute to global inflation. These trends are reshaping the business environment, according to Cui Li, Hong Kong-based head of macro research at CCB International Holdings Ltd. “The environment clean-up is and will be a key driver of the industrial consolidation,” said Cui, […]

Russia’s Rosneft confirms oil supply deal with China’s CEFC

20 Nov 2017   China, Russia

Rosneft had signed an oil supply deal with CEFC China Energy Company Ltd, Russia’s largest oil producer said in a regulatory filing on Monday, confirming a Reuters report last week.  Access to Russian crude could help China, the world’s top crude importer, in its ambition to create a globally integrated oil supply chain. As well as extending Russia’s lead over Saudi Arabia as China’s top oil supplier, the deal will make CEFC, a hitherto little-known fuel trader, a top-10 global oil merchant. It will also make CEFC a dominant player in the ESPO crude market and may enable it to challenge dominant Western […]

Despite Big Push From Beijing, Electric Cars Struggle in China

18 Nov 2017   China, Electric Cars

Electric vehicles aren’t yet living up to the hype, automakers in China are finding, as they churn out more EVs than they can sell to satisfy government directives. Beijing tempts buyers with subsidies and the construction of a vast charging network—and pushes consumers to buy electric cars in crowded cities. The policies have made China a driving force in worldwide development of EVs, and left foreign automakers scrambling to keep up. Yet at the Guangzhou Auto Show, companies are reckoning with the challenge of attracting buyers—and generating profits—while meeting Beijing’s requirement that electric vehicles account for roughly 3% to 4% of their total output in 2019. Volkswagen AG aims to build 400,000 EVs by 2020 to meet the green-car targets […]

China’s crude oil stocks fall for first time in a year

17 Nov 2017   China

China’s crude oil stocks fell for the first time in 12 months in October — by 27.41 million barrels from the month before — as crude imports hit a one-year low amid strong throughput at domestic refineries, S&P Global Platts calculations based on latest official data showed Thursday. The last time China saw a draw in monthly crude stocks was October 2016, of 18.32 million barrels. Stocks subsequently rose each month until a 20.16 million-barrel build was calculated for September. Analysts said the country was unlikely to see a significant crude stock build in November amid expectations refinery throughput will remain high in the month. China does not release official data on stocks. Platts calculates China’s net crude stocks build or draw by subtracting the official refinery throughput data from the country’s crude supply data. The latter takes into account net crude imports and domestic crude production. Latest data […]

China ready to deliver promises in full: top climate envoy

17 Nov 2017   China, Climate

China’s special representative on climate change affairs Xie Zhenhua delivers a speech during a high-level meeting of UN climate talks in Bonn, Germany , on Nov. 16, 2017. China’s special representative on climate change affairs Xie Zhenhua pledged that China will deliver its promises in full, and will continue contributing “Chinese wisdom” and “Chinese proposals” to the global fight against climate change, while addressing a high-level meeting of UN climate talks held here on Thursday. (Xinhua/Shan Yuqi) BONN, Germany , Nov. 16 (Xinhua) — China’s special representative on climate change affairs, Xie Zhenhua, pledged that China will deliver its promises in full, and will continue contributing “Chinese wisdom” and “Chinese proposals” to the global fight against climate change, while addressing a high-level meeting of UN climate talks held here on Thursday. “While restructuring economy domestically, China will deliver its promises in full, and will demonstrate the country’s readiness to […]

China Oil Demand to Peak in 2040

17 Nov 2017   China

Oil demand from China’s transportation sector will peak in 2030 and flatten thereafter, mainly due to falling gasoline demand for passenger vehicles that become more efficient and increasingly electricity-driven, the International Energy Agency said in its latest World Energy Outlook report on Tuesday. The flattening of China’s oil demand growth reflects its fundamental change from an industry-driven economy to one based on services and consumption, Platts reported. It also has major implications for Beijing’s reliance on oil imports, energy security and the overall energy mix. “China’s energy future will not be a continuation of previous trends,” the IEA said, adding that the country’s energy choices will have profound implications for global markets, trade and investment flows. Oil will still remain the backbone of China’s transport fuel demand till 2030, growing by 3.3% per year on average, but its share will fall to just above three-quarters, from nearly 90% today, […]

Rosneft board approves oil deal with China’s CEFC: source

17 Nov 2017   China, Russia

Russia’s Rosneft has approved a 2018 deal to supply CEFC China Energy about 12 million tonnes of crude oil as part of the Chinese firm’s $9.1 billion investment in the Russian oil major, a Chinese source with direct knowledge of the matter said on Thursday.  Of the total supply, CEFC expects to receive 8 to 10 million tonnes of ESPO crude from Russia’s Far East, said the source, in a deal that will make the Chinese firm a dominant player in the ESPO crude market and may enable it to challenge dominant Western oil traders like Vitol and Trafigura. The source, who declined to be named due to not being authorized to speak […]

China’s Mysterious Arctic Silk Road

16 Nov 2017   China, Russia

The Silk Road, renamed the Belt and Road Initiative (BRI), is developing infrastructure along land and sea trade routes. However, little is known about China’s initiative in the Arctic Circle, which represents a new route that Beijing is now able to develop thanks to technology together with the strategic partnership with Russia. Involving about 65 countries and affecting 4.4 billion people, constituting thirty percent of the world’s GDP, together with a total investment from Beijing that could surpass a trillion dollars, this is an immense project that requires a lot of imagination to grasp the intentions of the Chinese leadership. With a host of projects already in progress, and some almost completed (the Sino-Pakistan Corridor known as CPEC is archetypical), the overland and maritime routes are developing side by side. Plenty of ink has been used detailing Beijing’s intentions regarding the East-West connections of the super Eurasian continent. Pipelines, […]

China’s oil refiners rush to cash in on bumper profits

16 Nov 2017   China

Chinese oil refiners are churning out record amounts of fuel in the last quarter of 2017, looking to cash in on the best refining profits in nearly two years after a rally in diesel and gasoline prices. Officials at five state-owned oil processors said they are refining and shipping as much product as possible after receiving generous export quotas. That is creating a domestic shortage that China’s independent refiners – often called teapots – are rushing to meet, while also raising their output to profit from a hike in state-controlled gasoline and diesel retail prices. Sponsored “With major oil companies ramping up exports to use their additional quota, regions such as northeastern provinces showed tightness, giving teapots more space to sell their products […]

Volkswagen Plans $12 Billion Electric-Car Blitz in China

16 Nov 2017   China, Germany

Volkswagen AG and its Chinese partners will jointly invest nearly $12 billion by 2025 in developing electric cars for the local market, VW’s China chief executive said. That will enable the German auto group—which operates in China through joint ventures with the state-run SAIC Motor Corp. 600104 -0.86% and FAW Group Corp.—to release five electric-car models in China annually until 2025, or around 40 in all, Jochem Heizmann told reporters here Thursday. The Guangzhou Auto Show opens to the public Saturday. Some automakers, both foreign and domestic, are scrambling to meet a Chinese government requirement that electric vehicles account for roughly 3% to 4% of their total output in 2019, but Mr. Heizmann said that won’t be a problem for VW. With plans in place to have […]

VW commits $12bn to build electric cars in China

16 Nov 2017   China

Volkswagen will invest €10bn ($11.8bn) to develop new-energy vehicles (NEVs) in China by 2025, its China head announced Thursday.  The European carmaker will launch 40 locally produced vehicles in China, Jochem Heizmann told reporters at the Guangzhou Auto Show. Production of electric vehicles will begin during the first half of next year with Volkswagen’s new joint venture partner Anhui Jianghuai Automobile Group (JAC Motors).  The move comes as China moves to require automakers to reach production quotas for electric vehicles.

A delayed carbon trading scheme would also require carmakers to buy and sell carbon credits tied to the production of electric vehicles.  Under the scheme, the rollout of which was scheduled for 2018, EVs need to account for up to 8 per cent of vehicle sales in China. The new rules were delayed to 2019 after protests from Germany and other countries. Some auto executives also told Chinese industrial planner that they might have to reduce overall output to meet the target, according to two people familiar with the discussions.

The rules will not be enforced until 2020. VW will initially use JAC platforms to ramp up electric car production to meet the government’s quota. “The JAC joint venture is an interim solution to hit the NEV quota but will be phased out once VW can reach it with its own technology,” says Jochen Siebert at JSC Automotive, a consultancy in Shanghai.

China lists combustible ice as new mineral variety

China has approved listing natural gas hydrate, or combustible ice, as the country’s 173rd mineral variety, a move that will speed up the exploitation of the clean energy source, an official said Thursday. “China has succeeded in mineral prospecting and trial mining, both underwater and in the ground,” Ju Jianhua, head of the mineral reserves department of the Ministry of Land and Resources (MLR), said Thursday at a press conference. China completed a 60-day trial of combustible ice mining starting in May 2017 in the South China Sea, setting world records in both the length and total amount of extraction, according to the China Geological Survey Bureau. The MLR filed an application in mid-October for the resource’s inclusion in the country’s mineral variety list with the State Council, China’s cabinet, which gave the approval on Nov. 3, Ju said. China first discovered combustible ice […]

China’s electric car push set to trigger ‘war of attrition’

15 Nov 2017   China, Electric Cars

New Chinese rules mandating a boost in electric vehicle production are raising fears of a glut of battery-powered cars that carmakers will be hard pressed to sell. Regulations adopted in September require EVs to account for up to 8 percent of sales by 2020. But this far exceeds current demand in China, where electric vehicles accounted for just over 1 percent of sales last year. Now industry experts are voicing concerns that this will hit profits — and that some carmakers may not survive. “There will be pain in a coming war of attrition,” said Michael Dunne, an analyst based in Hong Kong who believes the mountain of government-mandated EVs could spark a shakeout in the industry as companies lose money. The wealthier EV producers and those with access to state funds would remain, he said, “while the less well-endowed fall away”.  Bernstein, the brokerage, said in a report last week that the new rules adopted in September would push car brands in China — including global groups such as VW and GM — to produce more than 2m EVs by 2020, compared with 336,000 passenger EVs sold in 2016.

Geely acquiring flying car startup Terrafugia

Zhejiang Geely Holding Group has entered into an agreement to acquire Terrafugia, a US-based company developing practical flying cars.Terrafugia was founded in 2006 by five MIT graduates; since then, the company has delivered a number of working prototypes. Terrafugia aims to deliver its first flying car to the market in 2019, with the world’s first VTOL (vertical take-off and landing) flying car being made available by 2023. Under the terms of the agreement, Terrafugia will remain domiciled and headquartered in the US, and continue to focus on its existing mission of developing flying cars. Terrafugia will also benefit from the Geely Group’s significant expertise and track record of innovation within the global auto industry. This deal has received approval from all relevant regulators including the […]

China’s oil demand to reach 15.5 million b/d in 2040: IEA

14 Nov 2017   China

Oil demand from China’s transportation sector will peak in 2030, and flatten thereafter, mainly due to falling gasoline demand for passenger vehicles that become more efficient and increasingly electricity-driven, the International Energy Agency said in its latest World Energy Outlook report Tuesday. Oil share to fall to about 75% of China’s transportation fuel in 2040 Electric vehicles to account for roughly one-fourth of China’s cars The flattening of China’s oil demand growth reflects its fundamental change from an industry-driven economy to one based on services and consumption. It also has major implications for Beijing’s reliance on oil imports, energy security and the overall energy mix. “China’s energy future will not be a continuation of previous trends,” the IEA said, adding that the country’s energy choices will have profound implications for global markets, trade and investment flows. Oil will still remain the backbone of China’s transport fuel demand till 2030, […]

China Gas sees bumper sales growth, to expand grid

13 Nov 2017   China

China Gas Holdings, one of China’s largest domestic natural gas distributors, expects sales to rise 30-45 percent this fiscal year and “sustainable high growth” the next few years due to Beijing’s clean air push, the company’s founder said.  China Gas, which counts South Korea’s SK Group and India’s GAIL among its investors, plans to expand its extensive pipeline network, and is in talks with potential partners on building its first receiving terminal for imported liquefied gas, Liu Minghui, the company’s founder and president, told Reuters in an interview last week. Sponsored Liu did not give the company’s outright gas sales volume for the financial year to end March 2018, but estimated his company makes up 8-9 percent of […]

A U.S. Natural Gas Bonanza In China Isn’t A Done Deal

13 Nov 2017   China, LNG

Building liquefied natural gas (LNG) plants is a notoriously expensive and lengthy proposition: one reason a 2012 study found the cost of the Alaskan project might actually be as high as $65 billion. And because the Asian gas market is forecast to be oversupplied until the early-2020s at least, and LNG projects are so risky, companies have a strong incentive to make splashy announcements with big partners, to frighten off other potential suppliers. The global LNG business resembles a giant game of chicken, with every player trying to convince the competition that they are poised to throw tons of money at scary, game-changing projects . If the Alaskan project goes through it will compete with Cheniere, which in turn might […]

China recovery pushes greenhouse emissions to global record

13 Nov 2017   China, Climate

Stronger Chinese economic growth will push global greenhouse gas emissions to a record high in 2017 after remaining flat for three years, dashing tentative hopes of a turning point in the world’s efforts to curb climate change. A new report by the Global Carbon Project, an international research consortium, predicts that carbon dioxide emissions from fossil fuels and industry will rise 2 percent this year. The report was released at the UN climate change meeting in Bonn on Monday. The increase — which is largely caused by China and developing countries — suggests the world is straying further from the course set at the landmark UN conference in Paris two years ago. Countries agreed at the time to limit the rise in global temperatures to no more than 2ºC from the pre-industrial era. But scientists warn that the emission reduction pledges made by individual governments since then do not go far enough to secure that overarching goal. “Emissions are following what countries have pledged — but what countries have pledged is nowhere near enough to meet the Paris objective,” said Glen Peters, co-author of the report and research director at the Center for International Climate Research in Oslo. This year’s rise is especially disappointing as it follows three years of almost no growth in emissions despite a world economy expanding at a steady clip. In 2016, emissions were flat even though the world economy grew 3.2 per cent. One explanation for the uptick is that China’s economic slowdown in the middle part of this decade was more pronounced than official figures suggested.

$43 Billion China-Alaska Energy Deal Looks Shaky

13 Nov 2017   China, USA

China’s largest oil company, Sinopec, signed a deal last week to explore the development of a massive $43 billion natural gas pipeline and LNG export terminal in Alaska. The project would carry natural gas from Alaska’s North Slope to its southern coast, where it would be liquefied and exported. The announcement was one among a flurry of putative deals inked as part of U.S. President Trump visit to China. But despite the hype, it is merely a non-binding vague agreement that lacks details regarding financing, offtake agreements, or timelines. Without those hard contracts, it is highly questionable whether the project moves forward. “This is a typical announcement that comes out of these big summits,” Jason Feer of energy consultancy Poten & Partners, told Reuters . “You really can’t build, or get financing for a big project, unless all those pieces are in place.” The agreement calls upon all parties […]

Rosneft, China To Deepen Strategic Cooperation

11 Nov 2017   China, Russia

Russia’s state-controlled oil giant Rosneft and Chinese energy company CEFC—which has agreed to buy 14 percent in Rosneft—are deepening their strategic cooperation by signing an agreement to study the possible construction of a petrochemical facility in China’s Hainan province. Rosneft and CEFC will set up joint working teams “to discuss technical configurations of the project as well as commercial and economic matters,” the Russian company said in a statement on Friday. The two companies plan to conduct a joint analysis of long-term supply of feedstock for the petrochemical facility in Hainan and to explore various options for monetizing the products, Rosneft noted. The joint petrochemical project would be the latest sign of closer ties not only between Rosneft and CEFC, but also between Russia and China. In early July, Rosneft and CEFC signed the strategic cooperation deal to collaborate in exploration and production, oil refining and petrochemicals, crude oil […]

China examines LNG potential in Alaska

10 Nov 2017   Arctic, China

A Chinese energy company, Sinopec, said it may be interested in looking at whether or not it can buy liquefied natural gas from Alaska on a regular basis. Alaska’s state government and the Alaska Gasline Development Corp. signed an agreement with Chinese lenders and China Petrochemical Corp., or Sinopec, to advance discussions on the LNG potential in Alaska. The agreement was signed in the presence of U.S. President Donald Trump and Chinese President Xi Jinping . An LNG project in the design phase in Alaska would connect a natural gas reservoir in Prudhoe Bay through 800 miles of pipe to a liquefaction plant on the southcentral Alaskan coast. “Sinopec […]

Trump’s $250 Billion China Haul Features Little of Substance

10 Nov 2017   China, USA

Most deals are non-binding, will take years to materialize ‘This is all for show,’ attendee at signing ceremony says Get the latest on our coverage of Trump in Asia and the world leaders’ meeting in Vietnam in your inbox daily. Sign up here . The headline number is impressive: A quarter-trillion dollars worth of deals from China that President Donald Trump can use to show he’s creating opportunities for U.S. businesses and jobs for his base. The reality, however, is that the roughly 15 agreements unveiled on Thursday are mostly non-binding memorandums of understanding and could take years to materialize — if they do at all. A day earlier, Commerce Secretary Wilbur Ross announced $9 billion of deals, many also MOUs with few details, rather than contracts. Read More: Details on the Deals Trump’s Team Plans to Unveil in China “To me this is an old-style visit when you […]

‘We’re engaged’: Alaska gets China backing for natural gas project

10 Nov 2017   Arctic, China

China’s biggest state oil company Sinopec, one of the country’s top banks and its sovereign wealth fund agreed on Thursday to develop a $43 billion natural gas project in Alaska, as the cash-poor U.S. state seeks to revive its dwindling energy industry. FILE PHOTO: The Sinopec logo is seen at one of its gas stations in Hong Kong April 26, 2010. REUTERS/Bobby Yip/File Photo The deal had been in the works since April and was sealed during U.S. President Donald Trump’s state visit to China. It is the second-largest pact among a slew of agreements signed during the trip between the world’s top two economies that are worth as much as $250 billion. Sinopec ( 601988.SS ), China Investment Corp [CIC.UL] and the Bank of China ( 601988.SS ) will work over the next year with the state government to hammer out the details of their […]

China Relaxes Rules For Teapot Refiners

9 Nov 2017   China

In a rather unexpected move, China raised the crude oil import quotas for “non state trade”—basically for independent refiners—by 55 percent for 2018 compared to 2017, signaling that it could be relaxing the rules for the so-called teapots and giving them more share of China’s oil imports. China’s Ministry of Commerce not only issued larger quotas, but made the announcement earlier than expected. Non-state companies now can begin applying for 2018 crude oil import quotas for a total of 142.42 million tons, or some 2.85 million bpd , up from 91.73 million tons in total quotas for this year. According to China’s official news agency Xinhua , the volume of the quotas for 2018 is equivalent to around 37 percent of China’s crude imports for 2016. Applicants for next year’s quotas should provide records of imports from the past two years or qualifications to process imported crude oil. The […]

Will China Bring an Energy-Debt Crisis?

9 Nov 2017   China

It is easy for those of us in the West to overlook how important China has become to the world economy, and also the limits it is reaching. The two big areas in which China seems to be reaching limits are energy production and debt . Reaching either of these limits could eventually cause a collapse. China is reaching energy production limits in a way few would have imagined. As long as coal and oil prices were rising, it made sense to keep drilling. Once fuel prices started dropping in 2014, it made sense to close unprofitable coal mines and oil wells. The thing that is striking is that the drop in prices corresponds to a slowdown in the wage growth of Chinese urban workers. Perhaps rapidly rising Chinese wages have been playing a significant role in maintaining high world “demand” (and thus prices) for energy products. Low Chinese […]

Factbox: China-U.S. commercial deals signed during Trump’s China visit

9 Nov 2017   China

U.S. companies, from chip giant Qualcomm to aircraft maker Boeing, announced a slew of deals on Thursday during U.S. President Donald Trump’s visit to Beijing. The deals could be valued as much as $250 billion, though some have been long in the pipeline and many are non-binding.  Below is a summary of the announced deals: * The state of West Virginia’s commerce department said China Energy Investment Corporation Limited plans to invest $83.7 billion in shale gas development and chemical manufacturing projects in the state. * China’s top state oil major Sinopec, Bank Of China and China Investment Corp agreed to help develop Alaska’s liquefied natural gas sector. Alaska Gasoline Development Corp signed a deal with the Chinese companies worth up […]

China Oct crude oil imports drop to lowest in more than a year

8 Nov 2017   China

China’s October crude oil imports slid to their lowest monthly level in 13 months, tumbling from a near record in September, as buying from independent refiners slowed with their import quotas draining away. Data from the General Administration of Customs showed on Wednesday that imports stood at 31.03 million tonnes in October, or 7.3 million barrels per day (bpd), up from the same month a year earlier but well below about 9 million bpd in September. “Lower imports reflected less purchases from independent refineries as many of them are running out of crude quota for this year,” said Li Yan, oil analyst with Zibo Longzhong Information Group. The lower imports in October were a surprise, the analyst said, as crude demand usually picks up in the fourth quarter with refiners’ processing rates strong. The import data came as China’s Commerce Ministry set its 2018 crude oil […]

China Focus: Northern China gets tough in anti-smog campaign

7 Nov 2017   China

With an orange alert for air pollution in place for the last two days, Beijing has new measures to deal with smog. The third and final phase of Beijing’s southeast thermoelectric center in Chaoyang District has begun a one-week trial. The gas-fired power plant will go online before the heating period of the city starts next week, according to Beijing Municipal Development and Reform Commission and the Urban Management Commission. The center is the last of Beijing’s four major gas-fired thermoelectric centers to come on stream, which together will cut the city’s coal consumption by 9.2 million tonnes each year. Meanwhile, nine construction companies have been caught breaking dust control rules and have been suspended from bidding on projects in Beijing for the next 30 days. The Beijing Municipal Bureau of Environmental Protection said Monday that more than 3,000 trucks were caught illegally carrying […]

Temperature inversion, warmth blamed for upcoming air pollution in Beijing

7 Nov 2017   China

Strong thermal inversion, pollutant accumulation and weak cold air are the primary causes of the heavy air pollution that is forecast in Beijing for the coming days, the municipal environmental protection agency said Friday. Heavy air pollution will strike the city on Saturday, with its concentration peaking on Monday. The air will gradually improve from Tuesday night when a cold front arrives. Meteorologists said the middle atmosphere of northern China had a relatively high temperature this winter, and thermal inversion was more frequent and stronger than previous years, which resulted in poor dispersion of pollutants. In addition, Beijing and many cities in the region are backed by mountains, which intensified the accumulation of pollutants generated in those cities and blown from plain regions. Beijing has issued an orange alert for air pollution, which will come into effect from Saturday. Beijing’s air pollution emergency response […]

Beijing-Tianjin-Hebei area to see heavy air pollution

7 Nov 2017   China

The Beijing-Tianjin-Hebei region and nearby areas will see heavy air pollution from Nov. 4 to Nov. 8, the Ministry of Environmental Protection (MEP) warned, urging local authorities to be alert and make plans. From Nov. 4 to Nov. 7, the central and west of the Beijing-Tianjin-Hebei region, as well as some areas of Shanxi, Shandong and Henan provinces, will experience heavy pollution, with the pollutant density reaching a peak on Nov. 6, according to the MEP. The ministry attributed the pollution to unfavorable weather conditions. A cold front is expected to disperse the pollution from Nov. 7 to Nov. 8, the MEP predicted. Despite government efforts to fight pollution, frequent outbreaks of smog have become increasingly common in winter in northern China where cold weather conditions and the burning of coal for heating combine to exacerbate the situation. To improve air quality in the […]

Stepping on the gas: China’s truckers scramble to meet LNG demand

7 Nov 2017   China

Li Ruipeng’s phone has been ringing off the hook with factories and hotels looking to get their hands on prompt supplies of gas. Gas trailers line up for filling liquefied natural gas at Caofeidian terminal, in Tangshan, Hebei province, China October 17, 2017. Picture taken October 17, 2017. REUTERS/ Aizhu Chen “Orders started to shoot up from September. Some are asking for deliveries the very next day,” said Li, a manager with privately run Huapu Gas, which delivers super-chilled gas by truck to customers within a 500-km (310 mile) radius of its base in Tangshan, east of Beijing. Huapu is one of a fast-growing band of trucking companies that are transforming China’s once-sleepy domestic spot market for gas into a unique and bustling business as Beijing pushes to wean the country off coal. Hotels, hospitals and factories have been forced to swap their coal-fired boilers […]

As China faces winter gas crunch, LNG prices soar

3 Nov 2017   China

China is hoovering up liquefied natural gas (LNG) cargoes worldwide, pushing spot prices for the fuel above those for oil-indexed cargoes, as energy providers scramble to avoid a looming winter supply crunch.  China has moved millions of households from burning dirty coal to natural gas this year, pushing up import demand amid an already tightening overall Asian market. Most Asian LNG supplies are delivered under long-term contracts with prices linked to crude oil. But with the upcoming winter heating season, Chinese utilities have turned to the spot market in desperation to cover themselves in order to meet surging demand, chartering tankers from as far away as Norway. “We expect (China’s national oil and gas majors) CNOOC, PetroChina, […]

The Oil Company That Lost $800 Billion In Shareholder Value

2 Nov 2017   China

Ten years later, almost to the date, PetroChina’s Shanghai-listed shares have dropped by a staggering 82 percent since the IPO, wiping out shareholder value of $800 billion , Bloomberg calculated. That’s more than the current market capitalization of Microsoft, or the value of the entire Italian stock market, or the combined net worth of the world’s 12 richest people, or Switzerland’s GDP—take your pick. Since the end of 2007, several factors—domestic and international—have combined to contribute to the biggest individual stock slump in history. And if that isn’t enough, analysts think that PetroChina’s rout on the Shanghai stock exchange is not at the bottom yet. On PetroChina’s first day of trading on the Shanghai Stock Exchange on November 5, 2007, its share price almost tripled its IPO price and took its market value beyond the US$1-trillion mark, the first time a company had been valued at more than US$1 […]

China lends hand to Russian LNG projects

2 Nov 2017   China, Russia

Russian independent gas producer Novatek said Wednesday it reached an agreement with a Chinese bank to help implement a Arctic liquefied natural gas project. Novatek said it signed a memorandum of understanding with the China Development Bank to cooperate on steering capital toward LNG. “Our strategy envisages a rapid growth of LNG production using international financing sources,” Leonid Mikhelson, the chairman of the Novatek board, said in a statement . “We already have a positive experience of cooperating with the China Development Bank on the Yamal LNG project, and we are glad to continue this mutually beneficial cooperation on our new LNG projects.” Novatek, the largest private natural gas company in Russia, leads the project aimed at sourcing the markets in the Asia-Pacific, alongside […]

Trump’s China Trip To Reap Billions In Energy Deals

2 Nov 2017   China, USA

U.S. President Donald Trump will visit China November 8-10 for a series of bilateral and commercial events, including a meeting with Chinese President Xi Jinping.On that trip, President Trump’s first visit to China—the country that he has repeatedly criticized for trade practices and the way it has handled relations with North Korea—the administration will be taking some 40 U.S. companies on a trade mission to forge deals and discuss Chinese investments in the U.S.One of the biggest deals up for discussion is an investment of around $7 billion by an alliance including China Petroleum & Chemical Corporation, or Sinopec, for an oil pipeline in Texas and an expansion of an oil storage facility in the U.S. Virgin Islands, Bloomberg reports, quoting a person familiar with the proposal. The deal is likely to be in the form of a non-binding memorandum of understanding, not a definitive contract. According to insiders, the investment will still need a final go-ahead by both the U.S. administration and China.

Sinopec, in partnership with ArcLight Capital Partners—a Boston-based private equity firm focused on energy infrastructure assets—and with Connecticut-based Freepoint Commodities, is expected to propose a project for building a 700-mile-long pipeline from the Permian to the Gulf Coast and a storage facility at the Coast, according to Bloomberg’s source. Sinopec also wants to expand an oil storage facility on St. Croix, U.S. Virgin Islands.

China and the New Energy Economy

2 Nov 2017   China

There is an increasingly inescapable sense that an energy transition of enormous proportions is taking place. The number of ‘bans’ announced on Internal Combustion Engine (ICE) vehicles is growing, even if governments are placing them relatively far out on the political horizon. More and more car manufacturers are taking note and shifting R&D spending into Electric Vehicles (EVs), a move which has profound implications for the development curves, and thus future cost, of EVs versus ICE vehicles. In October, US automaker General Motors said that it would launch two new pure electric models in 2018 and a further 18 by 2023. Its competitor Ford announced the creation of a new internal team to “think big and move fast” in order to accelerate the electrification of its auto production. Both are some way behind their European counterparts. It is not hard to see why such decisions are being made now. […]

China’s Sinopec mulls U.S. oil projects ahead of Trump’s visit: sources

31 Oct 2017   China, USA

China’s state oil major Sinopec is evaluating two projects in the United States that could boost Gulf Coast crude oil exports and also expand storage facilities in the Caribbean, two people familiar with the matter said on Tuesday, with U.S. President Donald Trump set to visit Beijing next week. With U.S.-China energy trade likely to feature prominently during Trump’s visit, the people said one of the projects could see Sinopec ( 600028.SS ) ( 0386.HK ) partnering with U.S. commodities trader Freepoint Commodities LLC and U.S. private equity firm ArcLight Capital Partners LLC. The trio is mulling building a pipeline to move shale oil from the Permian basin in Texas to the U.S. Gulf Coast for export, […]

The Biggest Stock Collapse in World History Has No End in Sight

30 Oct 2017   China

PetroChina, the first $1 trillion company, has sunk since 2007 The oil producer will report third-quarter earnings on Monday It’s going to take more than the biggest stock slump in world history to convince analysts that PetroChina Co. has finally hit bottom. Ten years after PetroChina peaked on its first day of trading in Shanghai, the state-owned energy producer has lost about $800 billion of market value — a sum large enough to buy every listed company in Italy, or circle the Earth 31 times with $100 bills. In current dollar terms, it’s the world’s biggest-ever wipeout of shareholder wealth. And it may only get worse. If the average analyst estimate compiled by Bloomberg proves right, PetroChina’s Shanghai shares will sink 16 percent to an all-time low in the next 12 months. The stock has been pummeled by some of China’s biggest economic policy shifts of the past decade, […]

Factories across China’s industrial heartland struggle with soaring gas costs

30 Oct 2017   China

Factories in China’s industrial heartland making everything from steel sheet to tofu and ceramics are struggling with soaring costs or facing closure as they wait for authorities to approve new gas-powered boilers, five industry executives told Reuters.  The problems illustrate the burden that is falling on China’s small- and medium-sized manufacturers because of Beijing’s radical shift from coal to natural gas and will raise concerns of insufficient power supply for industry. China’s central government has ordered regions near the capital to shut 44,000 coal-fired boilers that provide steam and energy for factories, including steel rolling mills, ceramics and chemical manufacturers, and convert or replace them with gas-fired boilers or switch to electricity by the end of October.

The change is part of the government’s push to wean the country off coal and reduce the amount of smog emitted by its industries. Other measures include cutting steel and aluminum output and curbing construction in northern regions. The city of Tangshan, in the province of Hebei which surrounds Beijing, set an earlier deadline of Oct. 9 for the conversions and said it would shut companies that did not comply. Tanghsan is China’s biggest steel-producing city.

From Russia With Love: A Super-Chilled Prize for China

28 Oct 2017   -, China, Russia

CNPC will be first recipient of Arctic project’s fuel Chinese investment helped defray impact of U.S. sanctions  Russia’s Yamal LNG , set to be the world’s biggest Arctic producer of liquefied natural gas, plans to send its debut cargo to China as thanks for its support. The first recipient of the plant’s super-chilled fuel will be China National Petroleum Corp. as this “is obviously a very symbolic point,” Mark Gyetvay, deputy chief executive officer of Moscow-based Novatek PJSC , the project’s main shareholder, said Thursday on a conference call. He didn’t give a date for the shipment. “It is our view that the first LNG tanker should be offloaded by CNPC in recognition for their overall contribution to the project and the importance that the Asian-Pacific market represents as a key consuming region,” Gyetvay said. The […]

China’s small coal miners weakened even as prices soar: association

27 Oct 2017   China

China’s small coal miners are still losing money and struggling to pay off debt after being ordered to shut inefficient, outdated operations and forced to miss out on a historic price rally, a senior industry official said. Jiang Zhimin, vice chairman of China’s Coal Industry Association, flagged the widening gap between big state-owned coal producers and the smaller private ones in the world’s top consumer of the fuel in the wake of a crackdown by Beijing on illegal mines and curbs on coal transport by trucks. “Many producers, who were ordered to cut capacity, did not deal with their debt properly. The debt ratio for these producers rose significantly,” Jiang said in a speech published in state-run China Coal News. In the […]

“It’s A Huge Story”: China Launching “Petroyuan” In Two Months

26 Oct 2017   China

The World Bank’s former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system. “The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. “The solution to this is to replace the national currency with a global currency.” The writing is on the wall for dollar hegemony. As Russian President Vladimir Putin said almost two months ago during the BRICs summit in Xiamen, “Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.” […]

Chinese offshore production lower than last year

26 Oct 2017   China

Chinese offshore oil company said its production at home was lower, despite gains in the overseas market. File photo by Project1photography/Shutterstock. Oct. 25 (UPI) — Incremental gains in overseas production weren’t enough to offset the declines in Chinese oil and gas production, state-owned CNOOC Ltd. reported Wednesday. The China National Offshore Oil Corp. said Wednesday that third quarter production of 116.2 million barrels of oil equivalent marked a 1.3 percent decline from last year. Offshore production from China yielded 73.8 million barrels of oil equivalent, a 2.3 percent decline from last year, while overseas production of 42.4 million boe marked a 0.7 percent gain from third quarter 2016. CNOOC said the drop in offshore China was because its fields were in decline, rather than regular maintenance. “During the third quarter of the year, the company made every effort to fully tap potential, constantly push forward quality and efficiency enhancement,” […]

China leads the growth in projected global natural gas consumption

26 Oct 2017   China

Global natural gas consumption is expected to grow from 340 billion cubic feet per day (Bcf/d) in 2015 to 485 Bcf/d by 2040, primarily in countries in Asia and in the Middle East, based on projections in EIA’s latest International Energy Outlook 2017 (IEO2017). China accounts for more than a quarter of all global natural gas consumption growth between 2015 and 2040. The projected growth in natural gas consumption in China is driven by environmental policies, relative cost competiveness of natural gas in the industrial and transportation sectors, and relatively high economic growth. China’s environmental policies are designed to reduce air pollution and carbon emissions by promoting natural gas in the country’s energy mix—replacing some coal and oil use with natural gas. In China’s 13th Five-Year Plan and the latest Energy Production and Consumption Revolution Strategy (2016-30), the Chinese government […]